The market was trying its best to rebound Wednesday, but mid day strength gave way to a decline by later afternoon. Still, top decliners on the Dow reversed their falls and pushed the index higher just before the close.
Just past  4 pm ET the     $S&P 500 Index (.SPX.US)$ traded down just 0.16%, the       $Dow Jones Industrial Average (.DJI.US)$ climbed 0.09%, and the $Nasdaq Composite Index (.IXIC.US)$ fell 0.30%.
MACRO
Wed...

Good morning, traders. Happy Wednesday, September 4th. The market is trying to remain in the positive Wednesday after Tuesdays start of the month drop. Boeing and Nvidia were back on the rise, though the rebound was not felt throughout the entire market.
My name is Kevin Travers; here is a quick update of stories moving on the U.S. stock market today.
$Dollar Tree (DLTR.US)$ stock was falling 18%, the lowest on the S&P 500 and Nasdaq 100 ...

Nice one thanks moomoo @moomoo Rewards

$Rivian Automotive (RIVN.US)$ Personally I think $90 to $100 is a good buy point for the long term. When Tesla $Tesla (TSLA.US)$ first appeared no one even new if EVs would be a huge thing nor were they backed by an Amazon with a load of pre orders. It makes perfect sense to me that Rivian could have a higher starting point. I think $10 is unlikely but who knows what could happen, anything can happen with stocks.

What happened after FED's meeting?
We are currently having a sector rotation from tech growth stocks into value stocks after Wednesday's Fed policy of 3 rate hikes in 2022 instead of 2 and also speed up tapering and ending it a few months earlier than expected.
The initial taper plan was $10B for treasury securities and $5B for MBS (Mortgage Backed Securities) but now it has doubled the speed of tapering to $20B for treasury securities and $10B for MBS and tapering to end by March 2022. Which shortly after, rate hikes should come in progressively.
The reason for the fed turning hawkish and a quick shift to taper at a quicker pace and more rate hikes was due to inflation at a 40 year high. They also did not expect inflation to rise above 2% in 2021 and kept mentioning about higher inflation rate being transitory. Current inflation is at 6.8% based on the YOY report.
How did this affect the market on Thursday?
When tapering is sped up, liquidity will be tightened in the market. There will not be as much free cash to be pumped into the market to let prices rally like we have seen the last 2 years.
Interest rate hikes will also dampen valuation on growth stocks as growth stocks are priced in more to future earnings expectations. If rates rise, it will hurt those expectations. Investors will start to see bonds and value stocks that thrive in high-interest rate environments a better asset class thus making it more appealing against higher-risk growth stocks.
Small-cap stocks usually also suffer because they tend to loan more money to fund the growth of the company thus making them more sensitive towards the rate hikes.
Thus we saw the $NASDAQ 100 Index (.NDX.US)$ and $iShares Russell 2000 ETF (IWM.US)$ mostly small-cap and tech stocks falling much sharper than $Dow Jones Industrial Average (.DJI.US)$ yesterday which consist mainly of value stocks.
What to do now? Should I exit my growth holdings?
That being said, inflation and rate hikes over the long run still don't pose a huge threat to growth stocks. It is usually short-term when the rotation happens towards value stocks. So take this opportunity to find good entry points into the stocks which are undergoing the selloff.
As always, trade safe & invest wise!
$Apple (AAPL.US)$ $Tesla (TSLA.US)$ $Meta Platforms (FB.US)$ $Microsoft (MSFT.US)$ $Amazon (AMZN.US)$ $NVIDIA (NVDA.US)$ $Adobe (ADBE.US)$ $Invesco QQQ Trust (QQQ.US)$ $SPDR Dow Jones Industrial Average Trust (DIA.US)$